Merck's LaRosa Implements Cost-Saving Global Strategies
Joe LaRosa relies on research, innovation, and shared best practices to maximize fleet efficiencies and reduce operational costs. As director, global fleet services for Merck & Co., he continues to look for ways to tighten costs and improve driver morale.
LaRosa’s varied accomplishments were recognized May 4 in Salt Lake City, when he was presented Automotive Fleet’s 2008 Professional Fleet Manager of the Year Award.
The award, now in its 24th year, was presented in a special ceremony at NAFA’s 2008 Institute & Expo. Sponsors include Automotive Fleet, Wheels Inc., and the Automotive Fleet & Leasing Association (AFLA).
The Professional Fleet Manager of the Year award was created to recognize an experienced and proficient fleet manager who has demonstrated special business acumen in developing and executing key management policies in all areas.
Qualified nominees are full-time fleet managers who control a company-owned or leased fleet in excess of 100 cars and light trucks combined and are recognized nationally among their peers for their unique abilities and accomplishments.
A 33-member judging panel, representing all areas of fleet, selected LaRosa this year’s award winner.
LaRosa Thinks Outside the Box for Global Fleet
LaRosa’s successful fleet management stems from his drive to continually evaluate better ways of operating coupled with his diverse background.
“I am a results-oriented individual, utilizing my financial experience to better understand the big picture,” he said. “Then I communicate that to my fleet manager and his staff.”
Prior to joining Merck in October 2007, LaRosa had a distinguished career at Bristol-Myers Squibb (BMS), where he spent 25-plus years in various roles in auditing, finance, and fleet. In 1995, he was the first person to join the company’s newly formed financial shared services department, where he spent more than 12 years as fleet manager.
During his tenure at BMS, he consistently decreased average cost per vehicle and saved the company nearly $4 million over two model-years.
LaRosa was also an industry leader in managing order cycles to take advantage of the strong fall resale market.
“In 2000, we were one of the first to look at a single order cycle per year to take advantage of fall resale market,” LaRosa said. “With GM early order incentives and the great resale market that year, we saved a great deal of money for the company.”
At Merck, LaRosa manages 8,765 U.S. vehicles and 13,780 non-U.S. vehicles, including 8,600 in Europe, and supervises three associates in the United States and one in Canada.
LaRosa’s day typically consists of strategizing for cost savings and monitoring fleet operating costs and administrative functions. Most of his planning is focused on uncovering different ways to reduce costs without cutting vehicle or driver services.
“I usually take my experiences here in North America and try to apply those ideas to the Europe, Middle East, and Africa (EMEA) or Latin America markets and vice-versa by taking successful experiences from each region and applying them globally if it makes sense,” he said.
LaRosa has experienced more similarities than differences across the globe. Even though leases are structured differently in Europe, the goal to save money on fuel, for example, is the same as in the U.S.
Other examples of similarities include adding content to increase resale values at lease term end, narrowing the number of suppliers (for example, reducing 19 different vehicle manufacturer suppliers in EMEA to a minimum of four across Europe), and consolidating the number of vehicles for the sales force (a move more readily accepted in Italy, Spain, Portugal, and Turkey).
“The results were increased resale values, increased rebates, and cost savings on vehicle selections,” LaRosa said.
Jim Frank, Wheels Inc. CEO, (right) presents the Fleet Manager of the Year Trophy to 2008 winner Joe LaRosa.
Strong Fleet Team Increases Departmental Efficiency
With seamless communication and constant knowledge-sharing, Merck’s fleet team is a model of success. The team holds biweekly meetings with staff from sales administration, finance, procurement, and safety in the U.S. and Canada to review fleet strategy and issues.
Additionally, the fleet team held its first annual Fleet Customer Service Council Meeting April 14, attended by both the internal stakeholders at Merck and external vendors. A general session was held with presentations by vendors, as well as ancillary vendors, i.e., Merck’s behind-the-wheel training vendor, car transport and storage company, and the incidental rental car company.
“Then, the fleet department held a Merck internal client meeting during which presentations were made by the risk management department to explain Merck’s self-insurance program,” LaRosa said. “We also had a strategy session on potential vehicles for the next model-year selectors.”
The Merck fleet department is led by Scott Lauer, manager of domestic fleet operations; Janet Van Derveer, fleet operations coordinator; and Cathy Weber, fleet coordinator.
“Scott has been with Merck for 17-plus years and understands many of the concepts I have been introducing to make positive changes in the operations of the fleet department,” LaRosa said. “And Janet and Cathy have been in the fleet department for six and seven years, respectively.”
Merck’s fleet coordinators work with more than 100 regional office administrators from various business units.
“They handle policy and administration and introduced regional staff to preparing financial analysis to better understand our total cost of ownership (TCO) model and monitoring costs and internal audit requirements,” LaRosa said.